The Kiwi made gains on the Euro overnight as Italy’s budget plans are at odds with the European Union rules.
Yield on Italian 10-year government bonds rose to 3.6% and the euro was broadly weaker after the European Commission told Italy it was a “source of serious concern” with the nation’s projected budget deficits for the next three years outside the European Union rules on government debt. Italy’s Deputy PM Matteo Salvini responded by calling EU leaders “enemies of Europe” who have brought “fear and insecurity” to the continent.
UK and EU squabble over who moves first in Brexit countdown
The pound reversed some of its recent gains overnight as the UK and European Union continue to struggle on a divorce deal. Both the UK and EU demand the other move first on proposals for a post-Brexit deal, with the EU seeking a new offer on the Irish border. The EU summit will be held on 18 October with hopes of a permanent solution tempered.
China slashes banks’ reserve requirements
China’s central bank cuts the amount of money banks must hold as reserves for the fourth time this year. The move is an attempt to spur on growth as there are still no signs of the US-China trade tensions easing. Asian stocks fell amid concerns over the economic drag and investors took harbor in the safe-haven Yen and USD.
Data to watch today is the Australian NAB Business Confidence number released this afternoon
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